Review of Ernst &Young LLP's Audit of TVA's Fiscal Year 2008 Financial Statements

TVA contracted with Ernst & Young LLP (E&Y) to audit TVA's balance sheet as of September 30, 2008, and the related statements of income, changes in proprietary capital, and cash flows for the year then ended. In addition, the contract called for the review of TVA's fiscal year 2008 interim financial information filed on Form 10-Q with the Securities and Exchange Commission. The contract required the work be performed in accordance with generally accepted government auditing standards. We evaluated E&Y's work to determine compliance with these standards. The objective of our review was not intended to enable us to express, and we did not express, an opinion on TVA's financial statements or on management's conclusions about the effectiveness of its system of internal control. E&Y is responsible for the auditor reports dated December 12, 2008, and the conclusions expressed in those reports. However, our review disclosed no instances where E&Y did not comply, in all material respects, with generally accepted government auditing standards.